Owning your dental practice can be great for your bottom line – and your own financial planning. And with the pandemic increasing the number of dental practices on the market, now can be a great time to buy. But like any kind of property ownership, the numbers need to make sense before you sign on the bottom line. Here’s what to know about buying a dental practice and selling it when the time is right.
What to Know About Buying and Selling a Dental Practice
If dental practice ownership sounds appealing to you, you’ll want to put your best foot forward. Here’s what to know.
- The right model can boost your cash flow. Owning your own practice can slash overheads and give you a wealth-building asset. But buying a practice is expensive – and so is outfitting one. Consider “renting” rooms or partnering with other practitioners or investors to spread the risk. Make sure your practice is mature enough to make a move and talk to an accountant or financial planner for recommendations. They can help you decide the right time to buy or sell based on your accounts.
- Location (and competition) is vital. All property hinges on location. If you’re shopping for a practice, think about where you want that property to be and what that location will look like in years to come. Is it growing? Is there competition? What are local taxes, permitting, and regulations like? These are also considerations when selling a practice – you’ll want to avoid selling when a market is in decline or is oversaturated.
- Having a line of credit matters. Cash is king, but you’ll most likely need access to credit either to purchase or build out your practice – even if you’re acquiring a property that is currently being used as a dental practice. Talk to banks, credit unions, and even hard money lenders about your options, and see how much credit you have at your disposal.
- Don’t go in unprepared. Buying or selling a dental practice can be a complicated transaction with many moving parts together with legal, financing, zoning, and business considerations. It typically takes two years to make the final decision on whether to buy or sell a practice: build the possibility of buying or selling into your business plan so that you have time to prepare.
- Gather all essential paperwork. When buying (or selling) a practice, you’ll need valuations, letters of intent, nondisclosure agreements, non-competition agreements, lists of liens, assets, or liabilities, and more. Talk to a lawyer or medical real estate broker about exactly what documentation you’ll need and how to gather it.
- Have pros on your side. Buying or selling a dental practice isn’t something you want to do by yourself. Engage a specialist medical real estate broker to ensure that you have access to all available properties, that you’re putting together your best offer, and that deals are structured in a way that prioritizes your needs. This is just as vital when selling as when buying.
Talk to GZ About Buying or Selling a Dental Practice
At Gittleson Zuppas Medical Realty, we specialize in medical real estate. We’ve spent decades connecting dentists with their ideal practices and helping to negotiate deals that deliver maximum value for you and your business. Whether you’re looking to buy your first practice, expand an existing one, or sell as part of a succession or retirement plan, we can help ensure your interests are looked after. Just get in touch, and we’ll help you with your purchase or sale – from beginning to end.